Now, hello. Welcome to Q3 Inside FOM, where we will look back together with Michael here on what has happened with FOM for the past three months. Just before we start, if any of you who's joined already can type in the chat or question area, if you can hear us, that would be nice. It should be good, I can see. Mm, yes. So now that that is done, if you have questions during the event, just type it down in the questions tab or the chat, and we'll pick them up and take them as we go along. Also, we have Stokk.io joined us on this event, so we're streaming on two channels at the moment.
So questions from the other one is also welcome, and they will be forwarded to us. Second note, it is actually FOM's birthday, eleventh birthday today. So we celebrated a little bit here, and with that-
No alcohol.
No alcohol, no cake, but yeah. But with that, I'll hand it over to Michael and share the presentation for today.
Yeah, and good evening, everyone, and thanks for watching. So the first theme we have is, according to the newsletter we send out, we have about eight themes. So we have a lot of bullets to go through, and we also have received the questions prior to tonight. So we'll try to see if we can take a few of the questions along the slides, and then the remaining questions we'll do in the very end. And of course, also follow up if some of you would have questions throughout the session here. Starting with our H1 half- year first report, the highlights, as we have listed, is that we are a growing company. We have increased our revenue.
The staff cost has increased, also, not at the same rate, so that is very good. We have an EBITDA that is in the range of what we saw in the year before, and also the net, the cash flow looks fairly unchanged. Finally, we have increased the numbers of staff. We are getting very close these days to around 100% increase for the last 9-10 months. But at the time when we did the report, around summertime, and also by the end of September, we are up, around 90%, and we have a few people that has been starting on the first. Last but not least, we have seen also, a tiny increase in our equity.
So all in all, we are think that we are in the right track and at the pattern that we have sort of described throughout our journey since we got listed. So, I think that I just had one question relating. So if we go one time back, yeah.
Yeah.
We have received a question about the H1 result, about the external expenses, why that has grown dramatically, if it looked like that. The reason for that is that we have done the half-year report and also the annual report we did last time. That is based on the new accounting standard that we would like to follow, the IFRS. And that means that we have done things slightly different than we did in the old days. And some of the elements we might make as a note, next year we do an annual report, but it's primarily related to commission for the distributors that we have. So that commission will go into this bullet here, but also all the general and administrative cost, it could be insurance, rent, and so forth.
That is also in this number here. So as we go along, and we would have comparable numbers for each year, it's not gonna look so dramatic as it is right here. So that was just to follow up on one of the questions relating to our first-year results.
So, yeah, Power-to-X?
Yeah, we sent out this investor news a few days ago that we have been involved in this consortium. We will take the lead on this. Power-to-X is one of our strategic areas, so we will look very much forward to this project that will be starting now, have a duration of two years. One questions that we received was particularly regarding this Power-to-X consortium. And the person that asked the question asked us to explain what kind of commercial opportunities is in this announcement here. This is related to software, hardware, and so forth. It's particular within characterization of the membranes, so it's both on the software and the hardware, but overall, it's a characterization.
As is, R&D project, along the two years duration, we would be more specific on what is it that actually will be developed. We don't have a clear sort of picture yet, but we know what kind of areas we would like to dig into. And I think that's the characteristics with these consortiums and these R&D projects, that you would end up with a result in the very end, and we have some ideas in the very beginning, but we don't have sort of a clear sort of perspective, but both software and hardware.
Yes.
Yes, we can take the next one. This was sort of one of the biggest news that we announced earlier this year, is our cooperation with a battery company. It's called NOVO Energy, which is a joint venture between Northvolt and the Volvo Group. They are buying equipment from us. They are building a giga battery factory in Sweden, and this was to a degree where we also changed the guidance for this year going forward. It's important to us for two reasons. A is because it's a corporate customer, so not only academic customer, but a corporate customer. And last but not least, this is related to scaling up and will end up in science that hopefully can be used in production.
So that's also a very, very important element for us. So we are looking forward to the project, looking forward to build even further ties, stronger ties-
Mm-hmm
... with the customer. And, yeah, we're looking very much forward to get another reference customers within the battery segment.
Absolutely.
Then we have a slide or a theme relating to Service Lifecycle Management, and that is important because as you grow, we add more and more professionalism into the organization. One thing that is very relevant for corporates is that we can also provide excellent service afterwards, if there's problems, but also to secure calibration, service, after sales, and so forth. So we're building a new department. We have hired one to head the department. He had his first working day on the first, and we are looking forward to have the that department to to be a as a very essential element of our company going forward. We are starting to see business from Australia.
This is very interesting because it's a geographic region that we believe that there's a much more potential. We have sold a machine to another corporation that is also within this energy harvesting area here. So Australia is on our map, and it's very, very interesting for us to see. We have a distributor out there, and it is with distributors that when you get starting to sell equipment, you get to know the equipment even better, the training, and so forth. So, this is an area that we would like to look very much into.
Before Michael's speech talks through this whole thing, we normally get a lot of questions during the presentation. By all means, ask away. I'm looking at the chat and questions all the time, and we'll stop Michael from going through, so we can ask the question. So by all means, ask away, either during or at the end. Yes?
Yes.
Next one.
We can take the next slide here. Yeah, this is also Australia. This was an academic customer that we used to have in the very beginning. So it's just a clear results that we both is interacting with academic customers, but also corporate customers in this region of the world. So I think that's very positive for us.
Absolutely. And conferences?
Yeah. A big part of what we do is to brand FOM Technologies, to travel out, participate in fairs and exhibitions, do presentations, and so forth. We have participated in six so far this year. This is one of them we have mentioned, so we don't sort of make a post every time. But fairs, exhibitions, presentations around the world is a long-term investment for us. We get to brand the company, we have speakers and so forth, and interact with potential customers. It might not lead to a sale in the very short run, so the salespeople come home and then say like, "Okay, by the way, I have this order," but it will materialize, and often people will need to meet the company.
They will meet them again on different fairs, and then when they have the interest, they will reach out to the company. So for us, this is a super important investment in the very long run.
Last but not least, regarding the conferences, as you see in the image, bringing our machines to showing what we actually offer in a physical sense has really proven to be valuable for gathering leads and ultimately sales.
Yeah.
We have a question from Stokk.io: Will there be revenue coming from the new service focus, SLM? Like, a yearly service contract, or is part of the price customer pays when they buy in it ?
Yeah. When we decided to establish this service department, it's very clear that in the long run, it has to be a profit center. It's not a cost center, it's a profit center, so we would need to have people that can do after sales. So we are maximizing the revenue for current customers, but also in order for them to establish contracts for servicing, calibration, maybe potentially software upgrades, and so forth. So it will be a profit sort of center, but as we all know, it's not gonna come from overnight. It will take time, and then we are certainly hoping to have an increase numbers of revenue over time to come from this.
Hopefully also with a really decent margins, because as we all know, everybody is chasing new customers, but they look at customers that you already have, and selling to existing customers is often more profitable, and you have already loyal customers. So definitely a profit incentive there.
Absolutely. If that answered that, then we'll continue from-
I have.
Yeah.
I just have a remark. For those of you who do not know what PV stands for, it's PV is sort of the abbreviation for photovoltaic. So this is primarily a solar conference that we participated in-
Yeah, it is.
It's just like photovoltaic.
And the other conference, we tend to try to spread it out, so we sort of cover all the applications areas that we cater for. But there are also conferences that are multiple, what do you call it? Application areas. So I guess continue to some staff news.
Yeah. We have two here, but we had many more in Q1, Q2, and also now we are into Q4. So the people that were hired and started this first is not here, and we also have people starting on the second of November. So more to come. And as I mentioned, that we are very close of doubling our staff numbers from when we had New Year's Eve last time.
Yeah
... in the year until now. For the last nine months, we have more or less doubled the staff numbers. So also one of the reasons why we to-
I was just about to say that, yes.
Continue.
No, no. It's also why we moved and yet again have the nice big office in the background and, instead of the meeting room we had in the first couple of Inside FOMs we did. That brings us, as far as I remember, to questions. So-
Yeah.
So...
We have many more questions that we have received prior to the event tonight. One question was related to when we described that we invest in digitalization and innovation.
Yeah.
You know, if we could be more specific of what that actually means. I think that's a really good question, so I've tried to sum up here. When we say digitalization, it's often systems, but also processes. I was just noting down in my preparation for this session here that we have in this year invested in additional software applications within our ERP system. We have acquired a project management system. We have acquired systems within social media. We have acquired software licenses related to production, our CRM system, but also regarding service. So a lot of licenses, a lot of investment. The other dimension is processes to have things much more digitalized.
We are investing heavily in getting away from paper to digitalizing, so you can send things around to all your counterparts around the world, so they have to fill out forms, digitally sign it, and then get things back to us. It is an investment, but it makes things much more professional and easier in the long run. So that is sort of one of the elements. The other one is innovation. When I think innovation, and when I write about innovation, it goes very much in relation to equipment, to machines, to solutions. And we have yet another year where we have developed and is about to develop a lot of new products and new solutions within drying capabilities, about increased and improved slot-die heads, machines, and so forth.
So we just think that innovation and product development is an ongoing task. It's not something that will finish. It's ongoing, no matter what kind of business that you run, you have to continuously be ahead of the curve and adapting to the market. So that is what we mean by these things here.
Anything else on that else? There is a question,
Yeah, I just would like to take one more before we take the question here.
Yes, yeah, of course.
The question that we got was related to a participant asking about the launch of green methanol, and the example was Maersk that has announced that they are heavily investing in green methanol, which they believe is the future. The question goes to whether we think that that is also an area that we would like to increase our presence within and look into that? The answer to that is no. At present, this is not on our agenda. We are not looking to develop processes related to green methanol. So for the time being, this is not a focus area for us. Whether it will be in the future, nobody knows, but at present the answer is no to that, unfortunately.
Yes. Let's take the question from here. "What are the expectations for the financial year of 2024 at FOM? Is there anything us investors can look for?
Yeah. This is a question that I can't answer here, because that would be insider knowledge. What we normally do and what we will do again this year, is that before we leave this calendar year we would announce our guidance for the next calendar year. I think that is a professional way of doing things. Before I can publish that and announce that, I have to have approval from the board. So what normally is happening is that in Q4 I will make a proposal together with my team here. We will propose it to the board. The board will either decline or accept my proposal, and when everybody has approved that, then we can announce it to the market, what our expectations for next calendar year will be.
Expect that that would be announced most likely in the beginning or mid of December. At least it would be before that we go into 2024. We will be looking and hoping for additional growth, but-
Of course
... right now, we don't have a formal guidance for next year, but that will come.
Do you have more questions?
Yes. I had a question that I also think is very reasonable and very good question. The question was related to our raised revenue, and the question is: "Why do we not see an impact on the earnings?" Because normally when you say, like, we are selling more stuff, then you would assume that we are making more money as well. In the ideal world, that is how it is and how it should be, but I think that that's also will be very clear when we do the wording in the annual report that we will do and publish that in the beginning of next year, that 2023 has and will be for FOM a huge investment year.
We have moved to a new headquarters. We are ramping up very aggressively on the staff. We are investing in new and improved distribution network, innovation and machines, digitalization, and so forth and so forth. So often you take a lot of investment in order to get the benefit and the return on the slightly longer run. So when I hire a new staff person here, they don't generate money overnight. It will take some time. So you grow in steps in terms of revenue, but also on earnings. And that's why we have announced that in the short run the earnings will not follow in a straight linear line as our revenue does. That's why we have announced as we have done.
But, I think the question is very reasonable, and I think it's very good. And my task and job on the long run is that we have as much as possible ending up at the bottom line, so we are profitable in what we do. So that is my task. Yeah.
On top of that, there's a question more.
Mm-hmm.
How has FOM managed to increase nearly all financial statements since the IPO? Additionally, any comments on those increases?
Yeah. Well, it's not sort of by law that any company can increase the revenue and so forth. We have found an area where we believe that we have a unique technology to offer. We have been good at executing that stuff. That's a combination of the strategy that you said, the team that you have, and so forth. And then, maybe also, even though that we have been ambitious, we are trying to sort of inform the market about levels that is still ambitious, but also what we believe is possible to reach. So if we are performing as we should do, and we do a little bit extra, then we will end up being able to increase the guidance for the market.
Some critics have been saying that, "Well, that's because you haven't been ambitious enough," and they have the right to have that attitude. I still think that we have been very ambitious, and we are growing and have been growing with 100%, since we started. Of course, you cannot do that internally, because it's easier to go from DKK 1 million to DKK 2 million than it is to grow from DKK 25 million to DKK 50 million and so forth. So of course, you cannot continue in eternity, but we try to be ambitious, and we try to have the right strategy and set the right team. But yeah, it's a lot about hard work, actually.
Of course, in marketing and sales, we look a lot into what we get every year in and how we work with them throughout the year. So we hopefully can expect or what will come into the pipeline and see when and so on. Yes, I can see that someone is writing, so but else we're getting close to the end. So if there's any final questions, then please shoot away in the... Yes, and there's one coming here: Where do you see the FOM slot-die coating technology going in the long run, thinking maybe 15, 10 years? Sorry, 5- 10 years. Which sort of sectors or commercial products are you aiming to innovate?
Mm-hmm. Yeah, that's a good question. It's often that I'm being asked about the future, and my standard answer is that I only look at two, maximum three years into the future because so many things can happen. If we go back a few years ago, who would have foreseen that we would have the COVID global problems about that, a war in Europe, where Russia, Ukraine, and so forth? So many things can happen and will happen. I think in five to 10 years, I think that slot-die coating has turned into a much more mature technology that is being used around the various segments. We see signs now that corporations are starting to test it in their facilities. We would continue to work within solar and batteries.
We have a few new areas that is no secret that we are testing and trying out. We have one area that is med tech. We have a handful of customers within this field. And then we also see quantum computing and quantum in general as a brand-new area. We haven't sold any equipment for that, but potentially that could also be a new area for us. Anywhere where you use some material science, where you need to coat in uniform layers, I think that you would see slot-die coating equipment to be used within these areas. So our challenge would be to grow with the market to continue to be competitive compared to the new competitors that will enter these markets and continue to have the superior products, technology, and the best people.
That is, what, what we can do, and then hopefully, continue to do, as we do now.
Follow-up query or another question: Are you expecting dilution of the stock, in the short to medium term?
No, that's again a question related to some insider knowledge. We don't have any plans for that for the time being.
Does management and board have stocks themselves and focus on creating shareholder value?
I can say yes to that. My funds are 100% invested in FOM shares, and so is my partners. So I can only say yes to that. Every day we go to work in order to increase the value of the company, short term as well as long term. Same goes for the chairman and so forth. So everybody is heavily exposed to and heavily invested in the company. So I think in Danish, you say that you have your hand on the table here, so very much so.
And then, one last question, I think, here. Are you expecting to increase the revenue in the same degree, generally, in the same degree as seen when you raised capital before, a correlation to the main market transfer?
Yeah. As I said, that, you know, we would do everything we can to continue to grow the company, but, it's getting increasingly difficult to double your revenue. As I said, like going from DKK 1 million to DKK 2 million and DKK 2 million to DKK 5 million, and so forth. So, we can only do what we think is the right approach, invest, building a team, so forth. So, yeah, that's just what we have to continue.
I think that's it. The last one is a comment. Thanks for the answers and a great presentation, and I can only say you're welcome, and we'll do it again in three months. And as long as people keep joining these events, we'll keep having them. And we see an increase in interest also in these events. So for us, we're just happy to stay late at work once in a while to entertain those who want to listen.
Yeah. And my final remarks is that, never hesitate if you have a question, you can write directly to me or to our IR, investor relations at FOM Technologies, and then we would try to reply as soon as we can. We would like to send out these quarterly updates very, very few days after the quarter is closed, and then hold these presentations like days or hours after that, so we don't wait long time for that. So already now we are starting to prepare and work for Q4. So that's how we work.
If you aren't already and can't wait for the next Inside FOM, then of course, our social channels, we push out bigger news on a regular basis. So please follow along there as well.
Yes. Take care out there, and hope to see you all again in the beginning of January.
Yes.
Have a nice evening.
Bye-bye.